US iGaming Payments: Are We Swimming with the Tide?
With the digital transformation in full swing, the US online betting market has surged back to life during a critical time in our industry. Reincarnation in our era means key stakeholders in the American market are perfectly placed to leverage the latest advances in tech – and drive the sustainable growth of their companies, fusing with tech from inception.
Payments, as a critical process for iGaming operators, is a fast-evolving landscape. New regulation, consumer expectation and innovative technology, all have had a major influence on changing the way our industry handles this fundamental aspect of iGaming.
We spoke with Trent Striplin, VP of Payments and Fraud, at Caesars Digital, to hear his expert take on the future of payments, and how we, as an industry, can take best advantage of the innovative tech-based solutions emerging in mainstream, regulated markets.
It’s been well documented that the pandemic caused a spike in AML activity. As we transition out of that period into the new normal, what key lessons do you think you learned that will benefit all of us going forward?
“Yeah, I think what we’ve really learned is the importance of monitoring for fraud and AML. In the early days of the pandemic, the industry was still in a hyper growth mode. It was very much about acquisition and acquiring customers, as quickly as possible. It’s almost a race to spend as much money as you can to get as many customers as possible through the door.
“What we didn’t really pay enough attention to was the AML and fraud side of things. I think what we’ve really learned is the benefit of partnering with a third-party provider who can help augment that side of the business. When PASPA was first overturned, there probably weren’t that many AML and fraud concerns. But as the industry grew, and expanded to additional states, we really became a target. We really saw an increase during the pandemic, as you alluded to, and identified the importance of utilising some of those broad tools.”
There seems to be a never-ending tide of tech innovations appearing in the IGaming space, with new concepts such as AI, biometric recognition, even blockchain? How do you identify which new products are really of true value? And what new payments-related tech are you most excited about?
“My LinkedIn inbox is always full of messages from salespeople, and it can be difficult to wade through it and determine what’s valuable compared to what’s not. Sometimes you just have to hop on a phone call and listen to them, because some of the products are just re-skins or reiterations of existing tools out there. However, there are some that are truly innovative. And that’s what we look for at the end of the day. We are driving to make the customer experience as frictionless as possible. Tools that allow us to do that, whether it’s on the payment side or a broader side of the marketing, that’s really what we’re looking for. We want to know: How can we make the business efficient and the customer experience as robust as possible?”
Some industry commentators believe the gaming sector lacks true innovation, and that we lag behind other industries, such as insurance or finance. Do you think we should look to these industries or any others for new learnings and innovative ideas?
“I may be a little biased, but, personally, I’ve always seen the big financial industries as lagging behind us in the tech sector. But with this being said, I think it’s always important to examine other industries, because there are pioneering ideas that you can glean. I was on a panel, at SBC North America, talking about the payment experience and how we compare to an Amazon or Ebay, and how we can learn from them. It’s always good to study the market and other industries, to see if there’s things that they are doing better, particularly if it concerns customer experience and content.”
The payment solutions package provided by operators has become crucial in driving retention and lifetime player value. Why? Which payment solutions, in particular, do you think will be most important to incorporate going forward? PayPal, CashApp, Google Pay, debit card, et cetera?
“I think the payment experience is extremely important when you look at the conversion funnel. The first big hurdles are acquiring customers and KYC. Once you’ve acquired them, you’ve got to make sure you have good KYC processes in place so that they can create an account. Then the next big hurdle is getting them to fund their account.
“Historically, you’ve seen pushback from large issuing banks not allowing card transactions to go through, which we know is one of the customers’ preferred methods of payment. A lot of that has changed over the last three years since PASPA was overturned and iGaming has really gained popularity in the US. However, there are still some issuing banks that are not approving card transactions.
“It’s important for me to “meet the customer” at the point where they’re at. I want to be able to provide a number of solutions that cater to different customer’s needs. You might have a customer that prefers to use their card to deposit, or you might have a customer that prefers PayPal for the security, because they don’t have to share their financial information. You also have online banking, with a number of providers allowing customers to utilise their online banking credentials to make a deposit, which is a really popular method nowadays.
“We’re starting to see the younger demographic utilising tech almost as a replacement for traditional banking. I believe that Cash App, Venmo, Apple Pay, Google Pay and integrated wallets in general, that make the experience smoother and easier, will take off over the next couple of years.”
Creating a frictionless customer journey will always be the ultimate goal for an operator. How does increasingly fragmented regulation across The States impact your ability to do this? And how can this be improved?
“State regulators are trying to find the right balance between consumer protection and business growth. States like Iowa and Tennessee, who have blocked credit cards entirely, want the customer to use their own funds – and not get out of control. This hasn’t had a major impact so far. This is due to the fact that credit card acceptance has been pretty low, and when you look at other states, such as New York, they put caps on credit cards. Furthermore, states like New Jersey and Pennsylvania require an additional level of KYC, whether that be document verification or a knowledge-based authentication process. These represent new introductions to consumer consent, and a level of customer experience that maybe they haven’t had to deal with in the past.
“Our goal is to make sure there’s an education component. We tell them why it’s necessary to ask for this additional information and why these restrictions are in place. This is important because a lot of the time the customer thinks this is [the company] Caesars making them jump through these hoops. We share educational info with our players to better inform them of regulations and let them know that this is actually a regulatory requirement. We want them to fully understand our responsibilities and intentions as an operator.
“When we look at building the frictionless customer experience, the goal is to have that “single sign-on” experience – where a customer logs into either their Caesars, FanDuel or DraftKings, account and there’s simply one account that they work with, and they don’t have to have individual accounts by state.
“Unfortunately, some of these regulations can introduce a little friction. For example, if a customer is travelling from New Jersey, Colorado or Tennessee it’s a different customer experience. We need to figure out how to make that seamless for them.
“The interesting thing that I’ll keep an eye on are the early adopters of AI gaming, such as New Jersey or Pennsylvania, who have put these frameworks in place. It will be interesting to see if that becomes the industry standard, as, potentially, newer states will probably follow the model that a lot of the operators have adopted – in terms of how fast they can grow the revenue and player base, especially as many of the budgets are still reeling from the Pandemic.
“As it matures, I believe the end-goal for our industry is to make sure that our players are protected. From a Responsible Gambling perspective, we don’t want a customer who’s going to come in and lose money and then burn out. It’s not good for our business as it presents no long-term value. It’s not good for the customer, and they will struggle with that if they do have a Responsible Gambling issue. From a humanitarian perspective, we want to make sure our customers are playing within their means. Enabling them to enjoy betting almost as an augmentation to watching the games on TV. It’ll be interesting to watch as the industry matures, as some of those customer protection regulations start to become more mainstream and standard.”
Trent clearly has a strong focus on being able to consistently strike the critical balance between consumer protection and business growth. Fraud and problem gambling are very real threats within the iGaming space, but Trent believes that we can’t allow this to have a deleterious effect, or negative impact, on customer experience. If we can make better use of available data–alongside new tech such as AI–then finding that all-important balance will be easier, and our industry can continue to grow sustainably.